SAPA calls for better definition of what constitutes an Australian business

The Sovereign Australian Prime Alliance (SAPA) — made up of NIOA, DroneShield, Macquarie Technology Group, AUSTAL and Gilmour Space — has released a submission defining an Australian business for the purpose of government procurement.

The technology and defence group — representing combined capital of over $5 billion — says Australia needs to tighten how it defines an Australian business, saying it should be an “Australian registered company … not a subsidiary of a foreign company … based in Australia, controlled by majority Australian shareholders, and governed by a majority Australian board of directors”.

SAPA says failure to crystallise a common definition in government departments has contributed to Australia’s falling economic complexity ranking (93rd, between Uganda and Pakistan). It is calling on the Department of Finance to examine “the industrial policies of Singapore, Israel, Taiwan and South Korea… [which] have rapidly advanced up the ladder of technological and industrial capability over the past 50 years with far fewer resources to draw from”.

SAPA believes the definition of an Australian business has played a role in Australia’s falling ranking in this key economic indicator. SAPA also submits that the definitions of an Australian company currently in effect across myriad legislative and regulatory regimes — as pointed out in the consultation paper the submission is responding to — are leading to multiple negative consequences which work against the national interest.

SAPA goes on to say that the Future Made in Australia policy explicitly seeks to secure Australian supply chains and build local capabilities in areas such as clean energy, defence and critical technologies. But a narrow definition of an Australian business based on formalities such as holding an ABN/ACN fails to capture the economic value of businesses contributing to Australia’s long-term prosperity.

“The current definition of Australian businesses allows government procurement to direct Buy Australian Plan policy towards ‘maximising opportunities’ for businesses including the likes of ACCIONA (headquartered in Spain but operating subsidiaries in Australia), John Holland Group (an Australian subsidiary of China Communications Construction Company) and Lockheed Martin Australia (a subsidiary of Lockheed Martin Corporation),” SAPA said. “Huawei Pty Ltd could also be used as a potential example of how solely using an ABN definition could work against the interests of Australian companies, national security concerns notwithstanding.”

SAPA is qualifying its argument by saying that it is not suggesting its genuine definition of an Australian business be designed and then implemented to enable preferential procurement decisions by APS procurement officials. Instead, “the central relevant point is that, without a proper definition of an Australian (or a non-Australian) business, government cannot make accurate assessments in order to direct policy or procurement decisions accurately where the corporate nationality considerations are concerned”.

Image credit: AUSTAL.